Fed's Neel Kashkari: Crypto is 'utterly useless'

With bitcoin suffering its worst price drop since the collapse of FTX sparked a far-reaching crash in cryptocurrencies back in 2022, there has been renewed debate about the value of digital assets.

This isn’t a debate many in the crypto community expected to revisit. Not after bitcoin hit a record $126,184 in October, fueled by institutional adoption and a friendlier regulatory push under the Trump administration to turn the U.S. into the “crypto capital of the world.”

But bitcoin has moved in lockstep with stocks. When tech and other risk assets slide, bitcoin slides too.

That’s raising fresh doubts about the industry’s long-standing claim that bitcoin will eventually act as “digital gold” — a safe haven during market turmoil.

During the 2026 Midwest Economic Outlook Forum in Fargo, North Dakota on Thursday, Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, did not mince words in dismissing the value of cryptocurrencies.

In response to a question from moderator Jim Ryan, chairman and CEO of Old National Bank, about artificial intelligence, Kashkari asked the audience to raise their hands if they’d used AI in the past week, including tools like ChatGPT or Google’s (GOOG) Gemini.

Many in the audience raised their hands in response to the first scenario, but no one appeared to raise their hands when it came to using bitcoin.

"Crypto has been around for more than a decade and it's utterly useless," he said. "AI has not been around as long and people are using it every day."

The fact that people are already using AI "demonstrates that this thing is real and it has real long-term potential for the US economy, as opposed to crypto," Kashkari added.

Kashkari not jumping on stablecoin bandwagon

And while stablecoins and tokenization have been gaining significant support in traditional finance, even among long-time detractors of bitcoin like JPMorgan CEO Jamie Dimon, Kashkari also cast doubt on their role in the financial system.

"I always ask people what can I do with stablecoins that I can't do with Venmo today?" he said in response to a question about innovation in payments from Ryan, who noted that Old National Bank was developing a platform for tokenized deposits.

"I could send any one of you $5 with Venmo or PayPal or Zelle," Kashkari said. "So what is it that this magical stablecoin can do? And then I get a buzzword salad answer."

Ryan admitted that "oftentimes we're building products in search of a business case," but added that "I think the best business case that I've heard (for stablecoins) is cross-border payments, moving money with less friction and less cost."

"But I'm a big believer that we need to keep these payment systems within the financial services system and keep those in the deposit realm because once they leave the deposit realm and go to other third parties, they're not going to be able to be leant in markets like Fargo and other places like that," he said.

Ryan was alluding to the ongoing dispute happening between the banking and crypto industries over stablecoin rewards that has kept passage of the crypto market infrastructure bill known as the CLARITY Act at an impasse.

The banking industry has been citing a recent report from the Treasury Department that said stablecoin rewards offered by the crypto industry could drain as much as $6.6 trillion in deposits from the U.S. banking system.

But the crypto industry remains defiant.

During the World Financial Forum held on Thursday at Mar-a-Lago - the private club in Palm Beach, Florida owned by his father - Eric Trump maintained that bitcoin will eventually hit $1 million, regardless of its recent downturn.

“You’re going to have volatility with something that has tremendous upside,” Trump said. “But I’ve never been more bullish on bitcoin in my life. I’ve never been more bullish on cryptocurrency in my life.”